The Russell 2000, a small-cap stock index, has been outperforming after the release of encouraging US inflation data. The index, which tracks the performance of 2,000 small-cap companies, has been on a steady rise since the data was released.
The US inflation rate for May 2021 was reported at 5%, which was higher than expected. However, the market reacted positively to the news, as it indicated that the economy was recovering from the pandemic-induced slowdown. The Russell 2000, which is considered a barometer of the US economy, has been reflecting this sentiment.
The index has been outperforming the S&P 500, which tracks the performance of 500 large-cap companies. This is because small-cap companies are more sensitive to changes in the economy and tend to benefit more from a recovery. The Russell 2000 has also been outperforming the Nasdaq, which tracks the performance of technology companies, as investors have been rotating out of growth stocks and into value stocks.
Investors have been bullish on small-cap stocks, as they believe that these companies have more room to grow and are undervalued compared to their larger counterparts. The Russell 2000 has been a popular choice for investors looking to diversify their portfolios and take advantage of the economic recovery.
In conclusion, the Russell 2000 has been outperforming after the encouraging US inflation data, as investors have been bullish on small-cap stocks. The index has been reflecting the sentiment that the US economy is recovering from the pandemic-induced slowdown, and small-cap companies are poised to benefit from this recovery.
